All manner of salesmen are coming out of the woodwork. With income so
painfully low for millions, the promises being made are eclectic and
enticing.

One reader from Surrey contacted me about a sales call he had received, suggesting he could might make a "13pc return" on wine in a year. He was considering investing some of his savings.

When income is so low – and "financial repression" is in full effect – it squeezes out rational behaviour. Suddenly, a 13pc return – be it from stamps, wine, US buy-to-let property – looks like something worth risking your capital to achieve.

Financial repression, as we have warned here before, is when the government deploys measures that help money quietly flow from citizens to Treasury coffers. In its current form, it is the low interest rates and the Bank of England's money-printing programme of quantitative easing. The combination of the two leaves you facing high inflation – at 2.7pc, figures showed last week – while the best you can earn on deposit, outside of tax-free Isas, is barely more than 2pc.

So you lose money and you are forced to invest to make greater returns. Meanwhile, the Government hopes it will benefit from you putting your money into the economy rather than keeping it on deposit. Chancellor George Osborne will certainly benefit from inflation as it helps shrink its debt pile which stands at around £1 trillion, at least in official figures.

Putting aside the offers from the spiv salesmen, money is also flowing into other risky assets – even without the hard sell. We highlight the explosion of interest in art (page 3) and the dangers for investors that accompany it. Meanwhile, demand for property investment continues to grow with industry figures last week showing nearly 1.5 million Britons now have buy-to-let mortgages (see right).

This surge should not be happening given that house prices are overvalued – by between 12pc and 21pc according to an authoritative regular study by The Economist – and the prospects for the market are bleak given that Britain's wealth is going nowhere fast.

But the market is caught in a spiral – rents have been rising fast because would-be first-time buyers cannot afford to get onto the market and are forced to remain as reluctant tenants. In turn, escalating rents have attracted more buy-to-let landlords, as the yields they can earn – nearly 6pc, according to property website Rightmove – continue to improve.

These elements feed on one another and the number of landlords grows.

The attractions to those who need to earn income from their savings is obvious, and with the solidity of property as an investment so ingrained in the national psyche, this is one investment that sells itself.

But those interested in protecting the value of their savings should remember the oldest of investment rules, that the offer of higher rewards nearly always comes with higher risk.